Original news
Mikki v Duncan [2016] EWCA Civ 1312, [2017] All ER (D) 157 (Feb)
On 11 October 2016, the High Court10 held that statutory interest payable on an insolvency (under rule 2.88(7) IR 1986) is not “yearly interest” for UK tax purposes. Such statutory interest is therefore not subject to UK withholding tax (20%).
The facts of the case are somewhat unusual in that there was a substantial surplus in the administration and the statutory interest was estimated at £5bn. However the decision is a welcome clarification of the position. It also confirms HMRC’s previous guidance on the taxation of statutory interest (subsequently withdrawn).
Welcome to the latest edition of DLA Piper’s monthly newsletter – Pensions Round-Up – in which we provide an overview of developments in pension legislation, case law and regulatory guidance. In this edition we look at key developments from October 2016 including the following. ■ The Pensions Regulator: the publication of reports which look at cases concerning the power to declare scheme amendments void, failures to complete the scheme return, and the potential use of the Regulator’s anti-avoidance powers.
In Lomas and others v HMRC [2016] EWHC 2492 (Ch), the High Court has confirmed that statutory interest payable on insolvency is not 'yearly interest' for UK tax purposes. The administrators therefore had no obligation to account for income tax on the interest payments made. The Court was also critical of HMRC's contradictory guidance on this issue.
Background
Long service changes
There are certain rules and regulations surrounding company liquidation, many of which focus on your actions as a director. Once a company becomes insolvent, you must put creditor interests first by ceasing to trade and safeguarding its assets, with little or no consideration for shareholders, members or directors.
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What does this letter say?
“I have today seen and distrained on the goods listed in the inventory below. I did this at xxx
Restructures of financially distressed firms often involve debt-equity exchanges. The concept is straightforward: the company issues equity to its lenders in exchange for their cancellation of some of the company’s debt. The company’s debt burden and interest payment expenses are reduced and its balance sheet is strengthened.
IN RE: MCKINNEY (June 23, 2010)
Generally the best evidence of a property’s market value is a recent sale price, but that is not always the case. The First District Appellate Court recently ruled in Calumet Transfer LLC v.